One Of The Best Places For Retirees Is A Quaint Texas College Town Full Of Restaurants And Music

While everything is bigger in Texas, size isn't everything when it comes to retirement and the cost of living. One of the best places to retire if lifestyle and cost are important to you, is Austin, Texas. This capital is the home of the University of Texas, and offers retirees a large lifestyle including music, art, continuing education, rollicking bars, and great food. If you're a music lover, Austin has you covered with events all year round including the Austin Blues Festival, the iHeartCountry Festival, and the infamous SXSW festival, which is a short list. Austin Eats and Beats and the ATX Crawfish Kickoff Festival are also just a tiny example of food events in the capital. Austin's food truck culture, including Cousins Maine Lobster — one of the most profitable Shark Tank products of all time — is comparable to Los Angeles' in quality. With 4,755 restaurants recorded in 2022 representing a $106 billion local industry, you'll have no shortage of dining options in a city where seven restaurants earned a Michelin Star in 2024.

More important to know where your retirement income is concerned, is Texas is one of several states without an income tax, which means your 401(k) or IRA are free from state taxation. In other words, retiring in Austin is just one way to reduce taxes on your Social Security. Here are a few more reasons to consider retiring in Austin, Texas. 

Assuming you retired at 65 years old, according to calculations from GoBankingRates, the minimum amount of total retirement savings you would need to live in Texas would be $830,000, or an equivalent $55,641 per year. In addition, The Federal Reserve 2022 Survey of Consumer Finances via Edward Jones places the median amount of retirement savings in the U.S. for Americans 65 to 74 years old at $609,230 total. While this sounds like you would be over $200,000 short, Austin doesn't represent all of Texas. GoBankingRates also puts the total yearly cost of living in Austin specifically at $42,045, which is $13,596 below the state average, and pretty fair for a capital city. That said, buying homes in Texas' big cities will cost you.

The median home price in Austin is $359,000, which according to Redfin, is $68,430 lower than the median U.S. housing cost of $427,430 as of December 2024. If you decide to rent, the median is an affordable $1,812 per month, which according to Zillow, is below the $2,000 per month U.S. average. A Place for Mom places the rent for independent living in retirement communities at $4,251 per month, which is a little bit more affordable than other parts of Texas like Rollingwood and West Lake Hills but is around $200 more expensive than both the national and state average. 

According to a 2024 study by E-health, 63% of Americans surveyed say healthcare costs take the top spot in terms of concerns in retirement. That's even ahead of running out of retirement savings or inflation. In fact, only 33% of people surveyed said they had considered the cost of healthcare in their old age, which is one major expense to consider in your retirement planning. As per a Place for Mom, Austin Texas, while not the most expensive place in the U.S. for assisted living, is still higher than the national and state average at $5,231. For comparison, the state average for assisted living is $4,647 per month.

Where home care is concerned, you'll do a lot better according to Care.com. As of February 2025, average cost for home care starts at $898 for 40 hours of care per week. That's a total of $2,917 per month or $35,004 per year. This follows the same pattern as assisted living in the sense that it's 19% more expensive than the state average and 5% higher than the national average. So while your retirement income won't face any additional state taxes, and the lifestyle in Austin is chock full of excitement and cultural amenities, you will pay to retire in the middle of that lifestyle in retirement.